A simple tax analogy to explain how it works.
 

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this...

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. "Since you are all such good customers,"he said, "I'm going to reduce the cost of your daily beer by $20". Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? How could they divide the $20 windfall so that everyone would get his fair share? They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

"I only got a dollar out of the $20 saving," declared the sixth man. He pointed to the tenth man,"but he got $10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more benefit than me!" "That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"

The nine men surrounded the tenth man and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government officials, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

For those who understand, no explanation is needed.

For those who do not understand, no explanation is possible.

I would like to take this moment to thank all American tax payers for their $300 million for the freeway bypass. No more fucking freeway running down main street.

"A simpler tax analogy to explain how it works."

People want something for nothing and use force to take it from other people. This is unjust, criminal, and should be violently resisted.

The end.

great analogy :thumbsup

Bravo !!!

I thought we were told in the 1990's that the national gasoline tax that Pres. Clinton imposed was going to take care of paying for our highways every year forever?

So didn't your freeway get built with that money? Or was that just more politicians lying to us to get more taxes?

Thanks for copying and pasting forwarded emails to GFY, asshole :2 cents:

At least you had the decency to remove all of the fwd and quote garbage

congress decides what things are spent on not the president.

also when the gov bails out the rich guy some how that's not welfare and looking for a hand out.

http://en.wikipedia.org/wiki/Highway_Trust_Fund

"The United States Highway Trust Fund is a transportation fund which receives money from a federal fuel tax of 18.4 cents per gallon on gasoline and 24.4 cents per gallon of diesel fuel and related excise taxes."

Doesn't anybody remember anything the govt. tells us when they do things? This must be how they get away with fucking us over and still have so many people screaming for MORE taxes. :(

We can agree there. The govt. shouldn't be bailing anybody out.

It should be in charge of national defense and bringing in just enough revenue to pay for that and infrastructure. Hell, Congress shouldn't even be in session but just long enough to pass bills for that.

Instead we have a bloated over-reaching govt. that spends money on such things as putting Martha Stewart in jail or investigating steroids in baseball.

10.6 billion dollars they spend every damn day.

Bitter?

I wasn't a Clinton supporter (up until we discovered he was getting blown in the Oval Office anyhow), and I do not recall this bill at all.

I'm sorry, when I said thanks the "American tax payers" I assumed everyone would understand that federal tax dollars were used to build the freeway bypass. So yes, it seems like some of the money came from President Clinton's bill.

This is a nice little propaganda piece, but not how the real world operates.

I agree about Martha and baseball. I think alot of that happens now is because of tv. Did you know supreme court confirmation hearings didnt happen until television was there. The banks had to be bailed out I hate to say it for people who depend on credit card sales.We would of been beyond fucked. It all would of collapsed it was so fucked up.

http://i123.photobucket.com/albums/o...40aro1-500.gif

Another way of putting it is that the guy in position 10 paid the people lower than him shittier and shittier wages until they couldn't afford to drink with him.

Had he paid himself just 10% less of the 10,000,000 he made every year and paid the 9th person 2% less of the 1,000,000 he made every year he could double the salaries of the remaining people leaving the 8th man at his current salary.

Then everyone would truly be happy.

Fuck your dollar 1%! I want my fair fucking share from the get go!

And what caused the banks to almost fail?

Mortgages.

And that was caused by de-regulation from Congress during the Clinton years.

It wasn't Clinton's fault, it wasn't Bush. It was career politicians in Congress (both Dem and Repub) doing the bidding of the bankers who give them large amounts of money and god knows what kind of special deals under the table.

That's why I get irritated when people (including Obama) try to pretend that Bush somehow ruined the economy.

He didn't. He was too busy running up the national debt and taking away our personal freedoms.

What annoys me most is that nothing has been done to change the laws that were used by these banks to give out these mortgages that caused all these issues so there is nothing keeping this from happening again other than the banks just realizing it is not a good idea. The problem with relying on them self policing is that last time they caused chaos they got bailed out so there is no reason to think this won't happen again in another 6-10 years.

Now let me just venture a guess here...you are going to vote for Romney or Obama instead of Libertarian, who support repeal of the income tax in favor of a consumption tax

I don't think they are going to change. The truth is, we the people, still want them. We want things we can't afford. In order to get the things that we can't afford, somebody needs to give us the money to do that. The only people that are going to give us the money so that we can buy things that we can't afford are people that know how to play a very tricky game and win every time.

What is going to happen to the congressman that places a vote that forces banks to stop giving out ANY sort of mortgage or car loan? That guy is going to get kicked out of office. Who will get put in office? The guy that makes those loans possible again.

Up and down. There have been dozens of stock market crashes over the last 200 years. We are a greedy, lazy people, eager to take the easy way out time and time again.

30 year mortgages, of any sort, are a very new thing. The US government pushed them into play after the Great Depression to get things rolling again. Ironic.

They don't have to stop giving out any kind of mortgages. What they need to do is change the law that allows savings and loan banks to act as investment banks so they can sell investment products and services.

For decades it worked great. You want to buy a house a bank gives you a mortgage. If you fail to pay it and the bank takes the house back it is between you and that bank. It wasn't so long ago that the bank that gave you the mortgage held that mortgages forever. Since those banks were going to be on the hook for any "bad" mortgages they gave out they were a little more picky about who they gave loans to and how much they loaned.

With the deregulation it allowed banks to give mortgages then bundle them and sell them to other companies as an investment product. This allowed banks like B of A and Washington Mutual to go crazy giving mortgages to anyone who was breathing and then misrepresent them and sell them off to other companies. Eventually it caught up to them. Washington Mutual is out of business and B of A is being sued by the government, but the damage was done and many of the players in that little game of buy and sell the mortgage got bailed out.

But I do agree with you fully that in a general we are greedy people who always crave more than we have. If you offer someone credit to buy something they otherwise could not afford they will buy it. Look at the car industry. It wasn't too long ago that the average car financing was 2-3 years and most people owned average cars. Then they expanded the financing to 4,5 and even 6 years. This allowed someone who normally could only afford a $20K car to buy a $40K car and they did just that. Drive through any suburb in this country and the driveways and garages are filled with overpriced SUV's. This attitude by many people is likely not to change.

I love how stating logic is like pissing in the wind while morons sit here flapping their shit pipes about how best to collect/spend stolen money.

I would love to vote Libertarian, but I don't think Gary Johnson stands a chance and it would be a throw away vote.

Did they get drunk?

Why is it throwing you vote away. If everyone who felt that way voted for a third party instead of picking the "lesser of two evils" we would have a third party, but too many people have the mindset that they have to vote for the person who will win, not the person they want.

lol @ libertarians - just a fancy word for 'kook'

also laugh at the totally disingenuous blackmail argument that the very wealthy and those that lick their boots continuously put up where they state that if you tax the rich enough they'll stop creating, stop producing, stop investing and go off somewhere and sulk. funny how in countries with much higher tax rates than the US there are all kinds of innovative companies who manage to get by and make billions - for example, IKEA.

really makes sense - IF my company can only make 30 million dollars in profit a year instead of making 35 million dollars then I'm going to take my ball and go home and do nothing and then you'll all be sorry!

i'm not for higher taxes on the rich, i'm not for tax cuts - i'm for fair taxes and until we have a true flat tax that means a progressive tax rate system and enforce the tax laws to the nth degree.

Mutt the real issue is not really that the rich will take their stuff and sulk , but rather the fact that when tax rates are sufficiently high then you encourage counter productive behavior. For example the wealthy hire advisers and tax consultants to look for ways to reduce their tax liability. A lot of time and resources are wasted doing this.

Secondly when taxes are punitive you find that tax compliance suffers , people actively hide income and don't declare it.

Thirdly they just reduce their working ours , take the French as an example , those idiots have increased increase that tax rate for earnings over a million Euros to 75% , now what a lot of guys will do in that bracket is cut back on the number of hours worked so that they don't get penalized by that threshhold. If i know that the next dollar I earn is going to taxed at a criminal rate , I would rather cut back on my hours and spend time with my kid , family or mistress.

This is not just a thumb suck , but proven finance theory. So at the end of the day a higher marginal rate can result in the fiscus earning even less in revenue than they would with a lower marginal rate. All of the behaviors I outlined will result in less output and less jobs.

The answer is a lower rate with less deductions and loopholes etc that is simple to administer and doesn't require the employment of a CPA.

"Not this shit again..... "




http://i.imgur.com/ijzmL.jpg

People dont realize that if you try to squeeze out too much from a company it will move overseas.
In Sweden we got some of the highest taxes in the world and a lot of companies have been forced to move to other countries and I do not blame them. In fact I think I will do it too since the politicians always talking about raising the taxes even more.

At the same time immigrants from some of the crappiest shitty countries on earth (Somalia) is coming here in very large amounts.
It wasn't long ago that I read a article about a small city with 200 Swedish people, do you know how many immigrants that the politicians placed in that small town? 200 fucking immigrants! LOL!

I cant fucking take it.

But problem is in this country few actually pay the actual tax rate. Its all a straw man argument.
During the internet boom business exploded and noone was moving over seas and they had higher tax rates. That's all supposed to scare us the job "creators " are going to go away fuck them. Ive worked for a few small businesses in my life and non of those guys were millionaires they did ok for themselves and their families. They had from 5 to 30 workers. Manufacturing is not coming back.

Soooo fucking true.

funny thing is, we are seeing something similar going on in our own industry by one of the biggest companies. It has been slowly falling apart, not giving the " Customers " what they are asking for and all the while the owner is flying around in a private jet and living large but the techs working for his company are sub par apparently because they wont pay enough to get better people.

So you are saying that you pay service providers (hosts, mechanics,
plumbers etc...) higher than the going rate for their services so they
can have a higher standard of living, just becuase thats the way that
things should be. Right...

It was supposed to but the republicans gave it away to oil companies in the form of subsidies.

The first thing you should look at is the difference between the ninth and the tenth man, the reason the tenth man pays so much is because the income inequality gap, here is a good article for you:

http://www.nationaljournal.com/next-...0120927?page=1

over the past 30 years the income of the 10th man has grown by 241%, the ninth man had only had his income grow by 89%. Everyone elses income grew by 18%. That chart should show a major crash in 2008 but the government bail out ensured the income gap remained strong.

Here is another article by the economic policy institute

http://www.epi.org/publication/ib331...top-1-percent/

The article basically lay out that this inequality has been driven by people who were corporate executives or in the finnancial industry. CEO to worker compensation in 1965 was 18.3 to 1, in 2011 it was 209.4 to 1. Like I said before there should have been a major correction in 2008 but they got a bail out almost double the size of the USA national debt

http://www.levyinstitute.org/pubs/wp_698.pdf

So if you buy the line that the top 1% is the job creators, then the best way for them to lower the tax burden would be to pay their employees more.

?The welfare state is the oldest con game in the world. First you take people's money away quietly, and then you give some of it back to them flamboyantly.?

Thomas Sowell

http://2.bp.blogspot.com/-nCD4oKQZBZ...600/tom_4b.jpg

You are a puppet of the republicans and the democrats, they persist in spreading this nonsense because they both know that if everyone who said that voted for johnson, Johnson would be president.

so voting for someone who hasnt earned your vote isnt throwing away your vote but voting for someone who has earned your vote is throwing away your vote....Good God people, y'all aint that dumb.